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Dec 8, 2018 at 4:00 AMDec 8, 2018 at 3:15 PM

ROCKFORD — A 1 percent sales tax approved by voters a decade ago transformed the city's Capital Improvement Program, more than doubled how much money it invests in infrastructure each year, saved millions in interest, and improved roads, bridges and storm water infrastructure across the city.

Rockford this week will close the book on the old way of paying for roads — a cycle of referendum, property tax increases and borrowing that wasted millions on interest payments — when it issues its final $20,750 road bond payment. The old way of doing things has been replaced. Now, instead of paying for roads and infrastructure repairs with loans repaid from property tax revenues, such improvements are paid for largely with revenue from a 1 cent-per-dollar sales tax.

The shift to the sales tax expanded the tax base to include visitors, commuters and anyone who shops in the city. It generated more money for roads and infrastructure without property tax increases. And because it's cash, the sales tax also eliminated debt and interest payments. Approving the final bond repayment check is a moment Alderman Frank Beach, R-10, has awaited for more than a decade.

"As a matter of fact, it's wonderful," Beach said. "I was part of that discussion years ago to go to sales tax, the 1 percent, and stop bonding. It saves the interest and gets more projects done ... since we went to sales tax, we haven't paid a dime in interest. I think that is an incredible benefit to the community and ought to be celebrated."

The city borrowed $64.4 million from 1997 to 2005 in general obligation bonds, about $7 million a year for road and infrastructure repair. But borrowing the money cost Rockford property owners $19.9 million in interest.

The 1 percent sales tax from 2008 to 2017 generated $157 million for infrastructure — an average of $15.7 million a year. Not only was the city able to use that money to attract millions more in state and federal dollars in the form of matching transportation grants and projects, it came interest free.

Voters rejected the 1 percent sales tax in 2006. But then-Mayor Larry Morrissey added a five-year sunset clause and initiated a grass-roots campaign that persuaded voters to approve it in April 2007. Voters have renewed the tax two times since then.

Sales tax revenues were spent last year to rebuild the $1.1 million Charles Street box culvert over Keith Creek and to complete the $1.8 million reconstruction of Spring Creek Road. Roughly $5 million a year is split among the city's 14 wards, funding more than 100 residential street and sidewalk projects each year. It has been used to help resurface or reconstruct 187 miles of streets and sidewalks.

Although the best way to spend capital improvement money is sometimes subject to debate, there is no doubt the sales tax has also allowed major projects to proceed. Even when sales taxes weren't a direct source of revenue for projects, the money generated by the sales tax freed the city to tap motor fuel taxes as a funding source.

Kishwaukee Street, South Main Street, North Main Street, West State Street and Harrison Avenue were state-led reconstruction projects the city sparked and helped pay for with motor fuel taxes that were available because the city could spend sales tax revenue on local roads and projects.

And Rockford streets, despite a constant battle with potholes, are overall getting better. Every three years, a Pavement Condition Index is compiled by a consulting firm that uses technology to measure stresses in pavement along every street in the city. Rockford streets improved five points on a 100-point scale — 100 being a perfect road, above 50 being acceptable — from 59 in 2012 to 60 in 2015 and 64 in 2018, City Engineer Timothy Hinkens said.

The sales tax "allowed the city to expand the CIP — to include funding for additional improvements other than just roads and bridges — to include using those funds to improve our storm water and drainageway facilities, enhancing strategic areas for economic development stimulation, upgrades to traffic signals and lighting, additional maintenance ... installing new bicycle and pedestrian facilities and implementing our (Americans with Disabilities Act) transition plan," Hinkens said.

Jeff Kolkey: 815-987-1374; jkolkey@rrstar.com; @jeffkolkey

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